US Dollar Drops, Markets Await Powell's Signal in Sintra
The US Dollar Index (DXY) fell sharply below the 96.00 level on Tuesday, recording a decline for seven consecutive days and hitting its lowest level in 3.5 years. This weakening occurred after Eurozone economic data showed positive results, especially from the manufacturing sector and inflation, which immediately boosted the Euro against the Dollar.
The US Dollar is currently burdened by a combination of factors: fiscal uncertainty due to Trump's controversial Tax Bill, new trade tensions with Japan, and expectations that the Fed will soon cut interest rates. Market concerns increased after Trump delivered sharp criticism of Fed Chairman Jerome Powell, which raised doubts about the independence of the US central bank.
Trump's comments threatening to raise tariffs on Japan starting July 9 also worsened sentiment, erasing market optimism that had emerged from the rare earth deal with China last week. This uncertainty has caused investors to start leaving the Dollar as a safe reserve asset.
Today, all eyes are on Jerome Powell's speech at a central bank forum in Sintra, Portugal. The market is hoping for a clearer signal on the direction of the Fed's interest rate policy. In addition, the US manufacturing PMI data and the JOLTS job openings report which will also be released today could have additional impact on the movement of the Dollar.
Source: (ayu-newsmaker)
